Disney’s stock has taken a hit. Of course, so has the entire stock market as a result of the Coronavirus and subsequent “closure” of the economy. With state and local orders ensuring that the Walt Disney World theme parks will be closed through May 2nd, many guests are wondering when they’ll be able to walk down Main Street USA again. Of course, when will the parks will reopen? isn’t the only question being asked right now.
As investors look toward the future, an important question isn’t when Disney will reopen, but what the crowds and revenue will look like when they do. The travel industry has been one of the hardest hit and while Disney lobbies for government money, analysts are trying to predict when the parks will return to “normal”.
With a 52-week high stock price of $153, Disney is currently hovering around the $100 mark, up from a low of $79 in late March. Recently, Wells Fargo analyst Steven Cahall downgraded Disney’s position from overweight to equal weight, writing of concerns about the theme parks segment of Disney’s business.
“We don’t think Parks can get back to anything close to full capacity until testing and/or vaccines are far more ubiquitous,” he wrote (via Marketwatch), and in his view, that means it could be 24 months before parks attendance normalizes. “We see the limiting factor as health-care technology as assets like Walt Disney World will either need to operate with social distancing in-place – significantly limiting capacity – or a vaccine will need to be widely enough available that the population will again feel safe in such a gathering”.
He argued that absent a health-care breakthrough, early reads from countries like Singapore, China, and South Korea indicate that social-distancing measures must remain to some extent even as countries get their COVID-19 outbreaks under control. Cahall lowered his price target to $107 from $155 in conjunction with the downgrade.
This downgrade comes at a time when Disney Executive Chairman Bob Iger talked about doing temperature checks at the theme parks and resorts when they reopen. As for what the theme parks will look like when they reopen, that’s anyone’s guess. We anticipate that there will be some significant social distancing protocols put in place as Disney (and the world as a whole) adjust to the “new normal”.
Walt Disney World and Disneyland are closed indefinitely as the Company does what it can to help flatten the curve and prevent community spread.
As always, keep checking back with us here at BlogMickey.com for the latest Disney Parks news and photos. We’ll continue to bring you news and photos, where possible, through the Disney Parks closure due to Coronavirus (COVID-19) and will resume our normal coverage once the parks reopen to guests, whenever that may be!